Your 8-Year-Old Needs a Budget

At what age should you give young adults control of money you have been accumulating for them?

LARRY ZIMPLEMAN: Like many questions, there is not a single answer that is correct for everyone. I think the key is that you start early–and with limited amounts to spend–to see how the young adult responds. I’d suggest that this process could start as early as age 8 or 10, when children are given an allowance and allowed to have some discretion on how to spend at least a part of that.

Unfortunately, we don’t teach financial literacy in schools so it’s up to parents to teach their children how to build a budget, how to manage a checking account, what a home mortgage is, etc. Finally, I’d suggest that young adults should not be given discretion over an amount so large that it can compromise their future.

Larry D. Zimpleman is chairman, president and chief executive of Principal Financial Group.